Whalesbook
Nexxus Petro Industries Limited has announced the sale of a 3.99-acre land parcel in Pali, Rajasthan, for ₹1.72 crore. This development comes despite the asset contributing a significant ₹51.75 crore, or 16.97%, to the company's turnover in the last financial year.
The land parcel carries a book value of ₹1.43 crore. The sale consideration represents a modest gain above its book value. Nexxus Petro classifies this divestment as the monetization of a non-core, non-performing asset intended to unlock value without impacting its ongoing operations. The company stated the land sale does not involve "substantially the whole of the undertaking."
This strategic move signals Nexxus Petro's intent to streamline its asset base and sharpen focus on core business activities. While monetizing non-core assets can improve capital efficiency and strengthen a company's balance sheet, the substantial revenue contribution from this specific parcel raises questions about how this income stream will be replaced or if its profitability was indeed negligible. The company's net worth currently stands at ₹32.26 crore, making the ₹1.72 crore sale consideration a notable amount relative to its equity.
Nexxus Petro Industries, established in late 2021 and becoming a public limited company in July 2023, primarily manufactures, trades, and sells petrochemical products, focusing on bitumen and bitumen emulsions. It operates processing units across India, including the site in Pali, Rajasthan. Following a successful IPO in September 2024 that raised ₹19.43 crore, the company has shown growth, with revenues climbing from ₹48.47 crore in FY22 to ₹237.78 crore in FY24, and net profit increasing from ₹0.54 crore to ₹3.48 crore in the same period.
With the sale, Nexxus Petro will receive ₹1.72 crore in cash, aimed at allowing management to concentrate on revenue-generating operations. This inflow could be used for debt reduction or reinvestment, while also decreasing the company's fixed asset base.
Despite assurances of no operational impact, investors will monitor how the significant revenue gap left by the ₹51.75 crore turnover-generating land parcel is addressed, and the profitability of that segment. The company has faced no significant past regulatory issues or litigation. However, an increase in debtor days from 23.7 to 35.8 days has been noted, indicating a potential watchpoint for working capital management.
Operating in the petrochemicals sector, Nexxus Petro's peers include Supreme Petrochem Ltd., T N Petro Products Ltd., Rain Industries Ltd., and Agarwal Industrial Corporation Ltd. These competitors are substantially larger; for instance, Supreme Petrochem boasts a market capitalization exceeding ₹13,000 crore, compared to Nexxus Petro's approximate ₹57 crore market cap. Nexxus Petro reported a net profit of ₹6 crore for FY25.
Key metrics highlight the sale's context: the land parcel's ₹51.75 crore turnover in FY25, the ₹1.72 crore sale price (approximately 5.3% of the company's ₹32.26 crore net worth). Investors will be tracking how Nexxus Petro utilizes the sale proceeds, its strategy to offset lost turnover, and future quarterly results for operational performance and profitability trends. Monitoring debtor days and overall working capital management will also be crucial.